Is there a rule of thumb for absolute purchasing power parity to hold?

Zhibai Zhang

Applied Economics, 2024, vol. 56, issue 7, 851-860

Abstract: The validity of absolute purchasing power parity (APPP) between the pairs of 55 representative countries, along with their pooled data, is examined empirically. A rule of thumb for the validity of APPP is tentatively proposed. That is, for a pair of countries exhibiting the Penn effect, when the GDP per capita of one country is less than half of the other’s, it is very likely that APPP does not hold. However, when the GDP per capita of one country is greater than half of the other’s, there is a certain possibility that APPP holds.

Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2023.2291098 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:56:y:2024:i:7:p:851-860

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2023.2291098

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().